BlackBerry's $965M loss, Stephen Harper's strong words on the Keystone XL pipeline and Republican Ted Cruz's Green Eggs and Ham reading
Smartphone maker BlackBerry lost $965 million US in its second quarter on its continuing operations and had revenues of $1.6 billion US, both in line with its earlier warnings to investors.
Revenues were down 45 per cent from the same period last year, the Waterloo, Ont.-based company said Friday.
BlackBerry said it booked sales of 3.7 million smartphones in the quarter, a drop of 74 per cent from the 14.5 million it sold in its best quarter ever, almost three years ago.
"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," chief executive Thorsten Heins said.
BlackBerry had already telegraphed that its second-quarter results would include a loss of between $950 million to $995 million on $1.6 billion in sales, far short of analysts' expectations of about $3 billion.
The results include a pre-tax inventory charge of $934 million and restructuring charges of about $72 million, the company said.
BlackBerry said in a statement earlier this week that it decided to cancel its usual post-earnings conference call "in light of the letter of intent agreement between BlackBerry and FairfaxFinancial Holdings Ltd."
On Monday, Fairfax proposed a tentative agreement to take the company private with a consortium of unnamed financiers for $9 per share.
The letter of intent values BlackBerry at $4.7 billion but allows Fairfax to walk away from the offer if it is dissatisfied with a number of conditions.
Marvin Ryder, professor of entrepreneurship at the DeGroote School of Business, said investors shouldn’t read anything into Heins' decision to cancel the conference call.
"I think it’s because he’s talked out. He’s got nothing more to say and there’s a chance that an off-hand remark could cause turbulence,” he told CBC News.
Ryder read more into BlackBerry’s dismal sales numbers – about 3.7 million units in the quarter, and mostly of the older BlackBerry 7 devices. He speculated that the Z10 and Z30 phones introduced this year are dead in the water.
“Maybe if they’re lucky, they sold one million of these new phones, 1.5 million of these new phones. Contrast that to Apple last weekend — nine million in three days. It shows you what BlackBerry’s up against,” he said.
Ryder believes Fairfax Holdings chief Prem Watsa may have rushed last Monday’s bid into the public eye to shore up BlackBerry stock.
“The $9 is actually a low-risk bid. If you take the cash in the company, that’s $5 a share – if you take the patents, probably that’s another $5 a share,” he said.
But doubts over whether Watsa will line up other partners is actually leading investors to drive down the value of the stock.
BlackBerry stock closed up 6 cents at $8.28 on the Toronto exchange and up 8 cents at $8.03 on the Nasdaq on Friday, still lower that the Fairfax offer.